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Colorado Recession Watch

In contrast to improved consumer sentiment and employment gains at the national level, economic conditions in Colorado slipped slightly in April. Unemployment increased to 8 percent, and employment fell. Furthermore, the latest data on food and medical assistance in the state suggests the need for these services is greater than ever. As a state known for performing better than the national averages, Colorado’s recent performance is disheartening.

Unemployment
In April, unemployment in Colorado ticked upward yet again, increasing to 8 percent. This mimics the national trend, and continues the second wave of upward unemployment since the start of the recession. (Figure 1) Nationally and locally, this second wave of unemployment may signal workers are restarting their search for work. Colorado continues to experience lower unemployment than the nation as a whole during the recession. The state’s unemployment rate is 18th lowest in the nation, and its recessionary increase in unemployment ranks 17th lowest.i

 

Employment
While the U.S. economy began shedding jobs as soon as the recession began in December 2007, the Colorado economy did not experience an overall decrease in employment until six months later in June 2008. Yet once losses began, the decline was dramatic. (Figure 2) From peak employment in May 2008, the Colorado economy has lost 160,500 jobs, or 6.8 percent of its labor force.ii While severe, these losses are on par with national trends — Colorado’s job losses as a percentage of the labor force rank 15th worst among states.iii In April, Colorado employment declined another 2,600 jobs.

 

A look at the current recession alongside the three previous recessions reveals the unusual depth and duration of the Great Recession. No recession since the Great Depression has been as long or as severe as the current one, which has lasted 28 months as of April 2010 and saw a 4 percent increase in unemployment at its peak.iv (Figure 3.)

 

Construction jobs
The construction sector has taken a huge hit during the Great Recession, losing more than one-third of total employment since the recession began. In April, Colorado construction employment declined another 3,000 jobs. (Figure 4)

 

Job shortfall
Job shortfall is a calculation to help put longer-term changes in employment into context. It measures the difference between actual employment and what employment would need to be to keep up with population growth. In April 2010, the Colorado job shortfall stood at 244,564 jobs. (Figure 5)

 

Medicaid and CHP+
During the recession Colorado has seen consistent and substantial caseload growth in Medicaid and the Children’s Basic Health Program (CHP+), programs that provide medical care for low income residents and children, respectively. (Figure 6) Since the start of the recession, the total combined caseload of these two programs has increased 31 percent. (Figure 7) During this period, the state population grew approximately 3.9 percent.v Thus, since the start of the recession, combined Medicaid and CHP+ caseload grew just under eight times faster than the state population. This explosive growth rate in caseload underscores the economic hardship for many Coloradans, who are forced to rely on the state for medical support in staggering numbers as the recession drags on.

 

 

Food stamps
The recession has also created a substantial need for the nutritional assistance provided by the U.S. Departments of Agriculture’s Supplemental Nutritional Assistance Program (SNAP), formerly called food stamps. (Figure 8) In February 2010, 398,862 Coloradans received food stamps, up 61 percent since the recession began. (Figure 9)

 

 

A slow recovery
With national unemployment turning positive in recent months, the Great Recession may be close to its official end. Still, the effects of the Great Recession reverberate throughout Colorado. Recently the downturn has produced a second wave of high unemployment and sliding employment. As a result Colorado continues to struggle with a growing job shortfall and a huge demand for nutritional and medical assistance.

Contact: Alec Harris
Policy analyst
303-573-5669 ext. 316

 

End notes
Unless otherwise noted all figures are from the U.S. Bureau of Economic Analysis Current Employment Survey

i Economic Policy Institute analysis of U.S. Bureau of Economic Analysis Current Employment Survey data.

ii Analysis of U.S. Bureau of Economic Analysis Current Employment Survey data.

iii Economic Policy Institute analysis of U.S. Bureau of Economic Analysis Current Employment Survey data.

iv NBER reporting of business cycles and contractions. http://www.nber.org/cycles.html

vAnalysis of Colorado State Demography Office population figures. http://www.dola.state.co.us/dlg/demog/pop_totals.html

 

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